Glenbard Dist. 87, West Aurora could save on big building projects
Taxpayers in West Aurora District 129 and Glenbard High School District 87 might end up paying less for money borrowed for school construction as a result of a state board of education decision Friday.
The Illinois State Board of Education got back authority to allocate $495 million in low- to no-interest bonding authority to local school districts.
"We are really excited about it," said Chris McLain, Glenbard's assistant superintendent for finance and operations.
Should West Aurora's application be approved, Superintendent Jeff Craig told the board, the district could save as much as $37.5 million in interest costs.
The Qualified School Construction Bond program is part of the American Reinvestment and Recovery Act of 2009. The federal government will cover most, if not all, of the interest costs on money borrowed by issuing federal tax credit general obligation bonds.
In 2009 and 2010, the federal government allocated $495 million of such bonding for the state, excluding Chicago. The Chicago Public School system received a separate $511.4 million allocation.
But in 2012, the state school board gave its allocation authority to the governor's office, with the idea that perhaps the state could borrow money on behalf of local districts.
That did not happen. And officials from West Aurora, Glenbard and other school districts have been asking for months for the state board and the governor's office to decide who should have the power, and to start acting.
What's next
The state board will take applications Dec. 1 to Jan. 15. West Aurora officials have been preparing documents, in anticipation of a positive vote Friday. The state board will then vote on the requests.
West Aurora hoped to borrow $60 million this way, but the board capped allocations at $50 million.
One state board member suggested capping it at $10 million, to make the allocations available to more districts. But ISBE Chief Financial Officer Robert Wolfe said administrators had considered many factors in coming up with the $50 million. That's what it would cost on average, he said, to build a 200,000-square-foot middle school or high school for 1,000 students.
District 129 officials estimate it could save property taxpayers up to $750,000 in interest for every $1 million borrowed.
How much allocation Glenbard and West Aurora get will also depend on how many other districts apply, and how much they request.
First priority will be given to those who have projects ready to go and have the ability to borrow money. If requests exceed availability, the state will additionally consider how much of the district is low-income; how much local money it has available to draw on, per-pupil; the age of the buildings; and the square-foot-per-student capacity of the buildings, compared to the national average.
In West Aurora's case, projects include replacing the 127-year-old Hill Elementary, and moving some early-learning students out of the 92-year-old Todd Early Learning Center. About 66 percent of the district's students are considered low-income, according to the Illinois State Report Card.
In April, West Aurora voters approved borrowing $84.2 million for construction and renovations.
Glenbard voters approved borrowing $35 million in 2014 for additions and renovations. Thirty-five percent of its students are low-income, and one of its four schools, Glenbard West, opened in 1922. It will ask for a $25.2 million allocation, and could potentially save $15 million in interest if its request is granted.
Wolfe noted that, according to the state's 2015 Capital Needs Assessment Survey, districts statewide reported $8 billion for capital needs for new schools, building additions and general repair work.